A monopolist claims that his profit-maximising quantity is 10 and the resultant market price is 5. What is the price elasticity of demand for the firm's product?
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2 marks, −0.5MicroeconomicsMonopoly and price discriminationLerner index and monopoly powerModerateabout 2 min
JNU SSS 2017 Question 37: Monopoly and price discrimination
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A monopolist claims that his profit-maximising quantity is 10 and the resultant market price is 5. What is the price elasticity of demand for the firm's product? (A) -1·5 (B) -2·0 (C) -0·5 (D) Cannot be determined
Monopoly and price discrimination has come up 128 times in 7 exams since 2004.
What this question tests
This question is on Lerner index and monopoly power, part of Monopoly and price discrimination in Microeconomics.
The mark-up of price over marginal cost and its link to the elasticity of demand.
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